Head to Head Survey: Groupon (NASDAQ:GRPN) versus RealReal (NASDAQ:REAL)

Groupon (NASDAQ:GRPN) and RealReal (NASDAQ:REAL) are both small-cap consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, profitability, institutional ownership, dividends and risk.

Volatility and Risk

Groupon has a beta of 0.23, suggesting that its share price is 77% less volatile than the S&P 500. Comparatively, RealReal has a beta of 2.69, suggesting that its share price is 169% more volatile than the S&P 500.

Earnings & Valuation

This table compares Groupon and RealReal”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Groupon	$498.42 million	1.91	-$83.52 million	($2.61)	-9.59
RealReal	$692.84 million	2.14	-$41.80 million	($1.02)	-12.06

RealReal has higher revenue and earnings than Groupon. RealReal is trading at a lower price-to-earnings ratio than Groupon, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

90.0% of Groupon shares are owned by institutional investors. Comparatively, 64.7% of RealReal shares are owned by institutional investors. 36.6% of Groupon shares are owned by insiders. Comparatively, 2.7% of RealReal shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Groupon and RealReal, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Groupon	2	1	2	0	2.00
RealReal	1	2	6	0	2.56

Groupon presently has a consensus price target of $19.50, indicating a potential downside of 22.09%. RealReal has a consensus price target of $17.75, indicating a potential upside of 44.31%. Given RealReal’s stronger consensus rating and higher probable upside, analysts clearly believe RealReal is more favorable than Groupon.

Profitability

This table compares Groupon and RealReal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Groupon	-25.26%	N/A	-20.08%
RealReal	-10.82%	N/A	-17.89%

Summary

RealReal beats Groupon on 10 of the 13 factors compared between the two stocks.

About Groupon

Groupon, Inc., together with its subsidiaries, operates a marketplace that connects consumers to merchants. It operates in two segments, North America and International. The company sells goods or services on behalf of third-party merchants. It serves customers through its mobile applications and websites. The company was formerly known as ThePoint.com, Inc. and changed its name to Groupon, Inc. in October 2008. Groupon, Inc. was incorporated in 2008 and is headquartered in Chicago, Illinois.

About RealReal

The RealReal, Inc. operates an online marketplace for resale luxury goods in the United State. The company offers various product categories, including women's fashion, men's fashion, jewelry, and watches. It primarily sells products through online marketplace and retail stores. The company was incorporated in 2011 and is headquartered in San Francisco, California.